In a new wave of job cuts, Microsoft has announced the layoff of 650 employees from its Xbox division, marking the second major workforce reduction of the year within its gaming arm. The job cuts follow a previous workforce reduction of approximately 1900 positions in January this year.
As per the company, these layoffs are part of broader restructuring efforts aimed at streamlining its gaming operations, particularly after its takeover of Activision Blizzard. The news about the recent layoffs was brought to light for employees through an internal memo from Microsoft’s gaming chief, Phil Spencer.
According to the memo, the latest wave of job cuts will predominantly affect corporate and support roles within the company’s gaming division. Spencer ensured that no games, devices, or experiences were being canceled, and no studios would be closed after the layoffs.
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Microsoft Offering Exit Packages With Severance Pay
"For the past year, our goal has been to minimize disruption while welcoming new teams and enabling them to do their best work," Spencer stated in the memo. "With these changes, our corporate and support teams and resources are aligned for sustainable future growth and can better support our studio teams and business units with programs and resources that can scale to meet their needs,” Spencer said in the internal memo, as reported by The Verge.
According to the Memo, the latest job cuts at the company will impact employees both in the US and internationally. For affected workers in the US, the company will be providing exit packages that include severance pay, extended healthcare benefits, and outplacement services to assist with the transition to new employment. Packages for employees outside the US will differ on regional guidelines and policies.
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Layoffs At Microsoft In 2024
Microsoft’s gaming chief also mentioned that these job cuts will enable the company’s corporate and support teams to align better with the studio and business units. "Our teams will now be better supported with programs and resources that can scale to meet their needs," Spencer wrote.
Notably, the recent layoffs came after the company reduced a large workforce in January 2024. During that period, Microsoft laid off around 1900 employees, including high-profile figures such as Mike Ybarra. The January job cuts followed Microsoft's $68.7 billion acquisition of Activision Blizzard, one of the largest deals in gaming history.
Since taking over Activision Blizzard, Microsoft has been focused on minimizing disruption while integrating new teams into its structure. According to the company, the restructuring will help Microsoft Gaming’s corporate and support teams better align with the needs of studio teams and business units.